American Express Blue Cash Preferred® Card Review

If you’re a frugal jetsetter who pays off credit card balances at the end of each month, then you’re probably a good candidate for a travel rewards card. This segment of the credit card industry is hyper competitive and as such, card providers pull out all the stops to attract different consumers to their card selections. Some offer $0 annual fees while others—like the Blue Cash Preferred® card from American Express—offer generous cash back programs. Although American Express isn’t as widely-accepted as Visa and MasterCard, there are many advantages (as well as some downsides) to adding the Blue Cash Preferred card to your wallet.

New Cardholder Bonuses

If you’re new to American Express, you could qualify for 100 Rewards Dollars with your Blue Cash Preferred card if you use it for purchases in excess of $1,000 within the first three months of card membership. This is a statement credit applied to your account within 6-8 weeks of reaching the spending requirement threshold and could cover your annual fees for two years.

Plus, get one year of Amazon Prime after you sign up for a new membership with your Card and meet the spending requirement in the same time period (An Amazon Prime membership gives you unlimited Two-Day free shipping on millions of items, which can really add up if you shop at Amazon as much as I do).

As an added bonus, the Blue Cash Preferred card has a twelve-month, 0% introductory APR for new cardholders.

Fees and APR

Annual Fees: Unlike the American Express Blue Cash Everyday® card, the Preferred version of this card carries an annual fee of $75 (more comparisons between the two cards below). As previously stated, this could be covered for two years if you meet the requirements for the 100 Rewards Dollars. However, the presence of an annual fee will require some calculations prior to applying for the card. If the cash back option does not exceed $75 per year, then you’re likely better off choosing a card with a lower or $0 annual fee.

Other Fees: Besides the $75 annual fee, the Blue Cash Preferred card also charges $5 or 3% of the total amount on cash advances and balance transfers, a whopping 2.7% foreign transaction fees (those who frequently travel abroad are better off seeking a credit card that charges no foreign transaction fees), and late payment penalties could cost you up to $35.

APR: After the twelve-month, 0% intro APR, the Blue Cash Preferred interest rates rise to 12.99%—21.99%, dependent on your creditworthiness and other credit-related factors. This is higher than non-rewards cards but mid-range for credit cards in the rewards category. For this reason, it’s recommended that those who tend to carry a monthly balance avoid rewards cards, because the interest payments generally exceed the possible savings.

Cash Back

A major benefit to going the Blue Cash Preferred route is the generous cash back program American Express has for its card members. If you have a Preferred card, you could earn 6% cash back from purchases made at US supermarkets, up to $6,000 per year (1% cash back thereafter). For department store purchases and fuelling up the car at gas stations, Preferred cardholders get 3% cash back. For everything else: 1% cash back. Cash back is received in the form of statement credit, and if you set up automatic bill payments through a Preferred card, you receive cash back for those transactions as well.

Blue Cash Everyday or Blue Cash Preferred?

One of the most pressing questions facing consumers who are considering an American Express credit card: should I get Blue Cash Everyday® or Blue Cash Preferred®? One distinct advantage the Everyday card has over Preferred is the lack of an annual fee. If you pay off your monthly balances but don’t plan on using your Blue Cash card for much of your spending, then the $75 annual fee for the Preferred card probably isn’t worth it. However, the cash back returns are much higher with the Preferred card:

Supermarkets: 6% cash back with Preferred or 3% cash back with Everyday (up to $6,000 in grocery purchases)

Gasoline: 3% cash back (no cap) with Preferred or 2% cash back with Everyday. For people living in areas where gas averages $4.00 per gallon, this equates to 12 cent savings per gallon with Preferred or 8 cent savings per gallon with the Everyday card.

Select US Department Stores: 3% cash back with Preferred or 2% cash back with Everyday Everything Else: both cards offer 1% cash back Blue Cash Preferred also offers 50 more Rewards Dollars (100 to Everyday’s 50) when you spend $1,000 within the first three months of card membership. The choice between Blue Cash Everyday and Blue Cash Preferred depends on your spending habits. If you’re a big spender, the $75 annual fee with Preferred will pale in comparison to the benefits you’ll reap from the higher cash back returns. But if you’re looking for a card with modest rewards and little upfront investment, Blue Cash Everyday is a better option.

Final Word

The sizeable annual fee, higher APR, and high foreign transaction fee will turn a few people away from the Blue Cash Preferred card from American Express. But if you spend a lot at supermarkets, gas stations, and department stores however, the Preferred card’s cash back benefits will likely exceed your annual $75 investment into card ownership. Combined with the new cardholder benefits (annual fees could be covered for the first two years of membership, after all), the Blue Cash Preferred card might be just what your wallet needs.

Disclaimer: This content is not provided or commissioned by American Express. Opinions expressed here are author’s alone, not those of American Express, and have not been reviewed, approved or otherwise endorsed by American Express. This site may be compensated through American Express Affiliate Program.

About Russell Kith

Russell Kith grew up in small town Wisconsin, the youngest of 4 boys. Having devoted most of his adolescent years to troublemaking, he left home at 18 and roamed across the world taking a variety of jobs he declines to specify. These days, you can find him writing about personal finance on the web. You can follow Russell on Google+ or Twitter.